Only One Thing Can Fix the Subprime Mortgage Mess: Time.

By now youve read all about the Bush administrations plan to help one million or so consumers by freezing, for five years, their adjustable-rate mortgage at the start rate. The idea is to help credit-impaired borrowers avoid foreclosure when their 2/28 and 3/27 loans adjust upwards.

The Bush plan outlined by Treasury secretary Henry Paulson (the former head of Goldman Sachs) in December isnt really a Bush plan after all. Its a private sector practice that Countrywide Home Loans and Wells Fargo Mortgage were already doing. Mr. Paulson grabbed the blueprints and pitched it to the rest of the industry that is, the firms that round out the list of the nations top five largest servicers:CitiMortgage, Chase Home Finance and Washington Mutual.

Thanks to consolidation in the servicing business, these five giants control 55% of all housing receivables in the U.S., according to survey figures compiled by this newspaper and the Quarterly Data Report.

Pitching Countrywide and Wells on their own plan was sort of pointless. There were already giving some of their borrowers ARM relief. As for the other three, Im not sure but I would guess they too had either implemented forbearance or were about to. So, what was the Bush plan all about? Heres a real shocker: it was about politics. The White House had to show that it is compassionate when it comes to the plight of the common man (and woman.)

Is the federal government throwing any money into this plan? Dont be silly. Money has to come from somewhere and that would mean legislation (something the Senate has given up on passing because so many of its members are busy running for president) or raising taxes, which would also take legislation. Raising taxes, particularly if youre a Republican, is a nonstarter. Republicans dont raise taxes. Period.

Then again, Im not sure throwing money at this problem would do much good. Youre already heard the arguments against a taxpayer bailout but Ill repeat them: the government should not bailout delinquents because it would reward ignorant homebuyers who were told by their loan brokers/LOs they could afford a $500,000 house in red-hot California even if they earned just $50,000 a year. It would also reward greedy investment bankers who were supplying liquidity to the market by financing non-banks making crazy payment-option ARMs, taking those loans and securitizing them and then selling the BBB pieces to foreign investors through CDOs.

Ah, but youve already heard my rants on the blame game before. Plenty of parties to blame. Its all Monday morning quarterbacking, I know. But if we dont learn from these mistakes of the past, we will repeat them again.